Most firms maintained staff pensions despite virus crisis - report

Most firms continue to see a strong business case for providing competitive workplace pensions, according to a report.

The CBI said its research indicated the majority of firms with defined contribution schemes did not reduce them. Picture: OJO Images / Rex Features

The CBI said its research indicated the majority of companies with defined contribution schemes did not reduce them during the pandemic despite the difficulties of the virus crisis.

The business group’s survey of almost 200 senior executives and 164 pension scheme managers also indicated that most believed higher contribution rates will be needed to ensure employees have enough retirement income.

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Matthew Percival, CBI director, said: “The vast majority of firms providing both defined contribution and defined benefit schemes maintained the amount that they pay in because they value the importance of competitive workplace pensions, despite the disruption caused by Covid-19.

“Businesses know that they have a vital role to play in offering advice to employees about saving for retirement. It’s also crucial that the Government educates people about the importance of having a pension.

“Employers are eager to build on the stand-out success of auto-enrolment and know that higher business contributions will be needed in future, but with firms only beginning to recover from the pandemic, and while they’re prioritising investing in more immediate pay and conditions to address labour shortages and rising living costs, any increase must take place over the next five years rather than in the short-term.”

Tess Page, of management firm Mercer, which helped with the study, added: “It is reassuring to see that, despite multiple pressures on businesses, support for pensions remains undimmed.”

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James Mitchinson